Dan Dinges has been the CEO of Cabot Oil & Gas Corporation (NYSE:COG) since 2002. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Cabot Oil & Gas
How Does Dan Dinges's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Cabot Oil & Gas Corporation has a market cap of US$8.0b, and reported total annual CEO compensation of US$14m for the year to December 2019. That's just a smallish increase of 6.0% on last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.1m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$7.6m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. Non-salary compensation represents a greater slice of the remuneration pie for Cabot Oil & Gas, in sharp contrast to the overall sector.
As you can see, Dan Dinges is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Cabot Oil & Gas Corporation is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance. The graphic below shows how CEO compensation at Cabot Oil & Gas has changed from year to year.
Is Cabot Oil & Gas Corporation Growing?
Cabot Oil & Gas Corporation has seen earnings per share (EPS) move positively by an average of 109% a year, over the last three years (using a line of best fit). It saw its revenue drop 7.4% over the last year.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Cabot Oil & Gas Corporation Been A Good Investment?
Given the total loss of 15% over three years, many shareholders in Cabot Oil & Gas Corporation are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We compared total CEO remuneration at Cabot Oil & Gas Corporation with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. Considering positive per-share earnings movement, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Shifting gears from CEO pay for a second, we've spotted 3 warning signs for Cabot Oil & Gas you should be aware of, and 1 of them is a bit concerning.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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